If you're a T-Mobile subscriber who hungers for an iPhone 4 or an international traveler who wants to use an iPhone 4 with a local carrier overseas, Apple this week has started to sell an "unlocked" iPhone 4, a phone not tied to a particular carrier – or, in this case, an iPhone 4 not tied to AT&T or Verizon. An unlocked iPhone 4 means you can shop around for a cheaper voice/data plan.
How does it work? If you look on the right side of your iPhone you'll see a long oblong outline with a pinhole at one end. This is where the iPhone's SIM card is located.
The SIM card (an acronym for Subscriber Identity Module, a fact you can now forget) is a little memory card/microchip about the size of a stamp on which is stored all the phone's operational information, such as the phone's phone number and who the carrier supplying your signal is.
You stick the tip of a paper clip into that hole in the side of your iPhone and the SIM tray pops out. You then drop in a SIM card from the carrier of your choice and slide the tray back in.
iPhone 4 Caveat Emptor
But of course, there's a catch. Four catches, in fact.
Catch 1: Only phones using the GSM cellular protocol use SIM cards – Verizon and Sprint use a cellular protocol called CDMA, and the phone's operational information is hard-wired into the phone.
And other than AT&T, the only other national GSM carrier in the U.S. is T-Mobile. All of Europe is GSM though, and there are a gaggle of GSM carriers in Asia around the rest of the world. So, no, you can't use the unlocked iPhone 4 on Sprint.
Catch 2: iPhone 4 requires a micro SIM, which is much smaller than a regular SIM card. You can see a comparison of the two sizes on this Wikipedia photo.
T-Mobile doesn't offer a micro SIM on its Web site, just the regular-sized one, but they're checking to see if one will be available for unlocked iPhone 4 users. (I'll update this when I find out, so check back tomorrow if you're curious.)
Even if the carrier you choose doesn't offer a micro SIM card, the Web is filled with tools to circumcise a full-size SIM (although I'm not nearly adventurous enough to attempt this).
For unlocked iPhone 4 overseas travelers, you can save a fortune on international roaming with a service called Maxroam.
You buy an iPhone 4 micro SIM card from Maxroam for 69 euro (around $100 U.S.) online. The price includes 90 minutes of international roaming voice minutes, 50 MB of data for Web surfing and email (which might last a day or so of usual Internet access) and 100 text messages to send.
As part of the online Maxroam purchase process, you choose a local number from more than 60 countries (you get voice roaming in more than 230 countries, data roaming in more than 200). You can then add as many voice and data minutes as you think you'll need, or add these on later. You also "provision" your Maxroam micro SIM with your usual U.S. phone number – that way, people only need to dial the number they already have for you and see your usual Caller ID when you call. You can get more details on Maxroam's Web site.
Maxroam won't work for us AT&T iPhone 4 owners, though. It only works with unlocked phones.
Catch 3: If you use this unlocked iPhone 4 on T-Mobile, you won't get 3G network data (Web surfing) connections.
T-Mobile uses slightly different cellular radio frequencies than the iPhone 4 to receive 3G signals. This means you'll only get slo-o-o-o-w Web connections. Your overseas data roaming experience may vary depending on the local carrier.
Now how much would you pay?
Catch 4: The price – $649 for the 16 GB edition, $749 for the 32 GB model.
Whoa?! I hear you say.
You see, without signing on with an authorized carrier such as AT&T or Verizon, there is no subsidy.
You didn't think you paid full price for your AT&T or Verizon iPhone 4, did you? You actually get a steep carrier-subsidized discount.
According to media reports, AT&T's iPhone 4 costs $187.51 to actually build, the Verizon version slightly less at $171.35. Once you add in all the distribution, marketing and other non-materials cost, each iPhone 4, according to one Apple competitor, costs AT&T $622.
AT&T only charges you $199 for a 16 GB iPhone because the carrier will earn back the discount it gives you over the course of your two-year contract – which is why iPhone 4's monthly charges are so high and why there is a pricey opt-out penalty if you terminate your contract early. The carrier just wants to earn its iPhone 4 costs back.
Those unlocked iPhone 4 prices are closer to what iPhone actually costs. But now you can go out and buy a much cheaper monthly voice/data plan than AT&T or Verizon charge – although, when you factor in the higher price of the unlocked iPhone 4, the money spent over the life of the phone is probably a wash.
For some, though, that's the price of freedom from AT&T and the freedom to roam cheaply internationally.